Shares of Amara Raja Energy & Mobility Ltd. fell 5% on Tuesday after its second-quarter profit missed analysts' estimates, leading Nuvama Institutional Equities to cut its target price on the stock.
The company's profit after tax rose 6% year-on-year to Rs 240.71 crore in the quarter ended September 2024, according to an exchange filing. This compares with the consensus estimate of Rs 265 crore given by analysts polled by Bloomberg.
Revenue during the same period grew 12% year-on-year to Rs 3,136 crore, while Ebitda rose 8% to Rs 441 crore. However, Ebitda margins contracted slightly by 50 basis points to 14.1%.
The company is focusing on expanding its electric vehicle business, with plans to set up lithium cell manufacturing plants in the coming years.
Nuvama has also revised earnings estimates for fiscals 2025 to 2027, lowering Ebitda projections by 3-4% due to lower margin assumptions. In response to increased competition in the lithium battery space, Nuvama Institutional Equities reduced the stock's target price from Rs 1,980 to Rs 1,580.
Amara Raja Q2 FY25 Results (Standalone, YoY)
Revenue up 11.5% at Rs 3,135.83 crore (Bloomberg estimate: Rs 3,351 crore)
Ebitda up 7.5% at Rs 441 crore (Bloomberg estimate: Rs 458.5 crore)
Ebitda margin down 50 basis points at 14.1% (Bloomberg estimate: 13.7%)
Net profit up 6.32% at Rs 240.71 crore (Bloomberg estimate: Rs 265 crore)
One basis point in one-hundredth of a percentage point.
The company has declared an interim dividend of Rs 5.3 per share of face value of Re 1 each. The record date has been set as Nov. 14. The dividend is payable as on Dec. 3.
Shares of the company fell as much as 4.66% to Rs 1,310 apiece. The stock pared losses to trade 4.44% lower at Rs 1,313 apiece, as of 10:24 a.m. This compares to a 0.08 decline in the NSE Nifty 50 Index.
The stock has risen 61.47% on a year-to-date basis. Total traded volume so far in the day stood at 1.08 times its 30-day average. The relative strength index was at 43.98.
Out of 17 analysts tracking the company, seven maintain a 'buy' rating, four recommend a 'hold,' and six suggest a 'sell,' according to Bloomberg data. The average 12-month consensus price target implies an upside of 4.7%.
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